In order to understand digital business transformation in context, let’s begin with how we are in private: People use digital services from companies like Apple or Amazon. If they order a song, it’s available on their computers in a matter of seconds. A book will be on their desks the next morning at the latest. It’s an experience a lot of people make, and one they have gotten used to.
Now, people have started to transfer these patterns of behavior, concepts, and desires from their private lives into their business ones. At work, they now expect suppliers and colleagues to provide the same kind of service. They will no longer accept a situation where, for instance, the process for ordering supply parts for the automotive industry takes longer than a few minutes, or that it can be difficult to find an expert on a particular subject within their own company.
In times of limitless global communication, social media with billions of users, almost unlimited mobility, and constantly increasing and ever more personalized volumes of data, it should be possible to resolve these issues in a better and quicker way – by using smart technology that, for example, analyzes and utilizes data within fractions of a second. But more often than not, that’s more a case of wishful thinking than reality.
A look at traditional industries
It goes without saying that, when discussing these challenges, we aren’t talking about Internet start-ups or corporations like Apple or Google, where this way of thinking and behaving has long been established and is a part of their DNA. It’s a lot more exciting to take a look at other sectors – at the 94 percent that do business in traditional industries.
Many of these companies are investing in digital technologies. But some of them – we call them “digital masters” – are doing it better than the others. They engage with the technology in a completely different way and are far more profitable than their competitors. So what can we learn from those that do well? It’s that they don’t just use digital technologies and modify their IT infrastructure, but also develop new leadership models and capabilities to drive the transformation forward.
They develop new leadership models to drive the transformation forward.
Focus on digital masters
Let’s look at three short examples: The business model of Swiss corporation
isn’t only about installing elevators and taking care of service. The company is now using forward-looking methods of analysis to increase the operational life of their products and to reduce maintenance costs. Schindler is developing a vision where elevator operation is optimized by the company’s very own software. Their objective is to reduce journey times inside buildings by coordinating how individual elevators are loaded and used. The second example: Schindler
The Indian paint manufacturer
offers more services than it used to. With the help of new technologies, the corporation has centralized and standardized its core processes. This has helped the business transform itself from being purely a provider of paints in India into a company that offers renovation services in 17 countries. Asian Paints
And finally, case number three,
: The sporting goods manufacturer with operations around the world has put an immense amount of effort into connecting with its customers and with people within the company on social media. Today, Nike still sells clothing, but in future, the corporation would like to play a role in the users’ lives – for example by sharing sporting achievements in fitness apps, creating virtual trainers, or personal product designs. Nike
Opportunity for change
What these three companies and other ‘digital masters’ have in common is that they do not see transformation as a technological challenge. Instead, they see it as a good opportunity to change their own processes, business models, and the customer experience in a fundamental way. And it’s not just IT specialists that they involve in driving this change. They work to have management enforce the change from the very top. That is the most important factor for mastering digital transformation in the long term.
In 10 years, we will see completely different developments that we couldn’t come close to predicting today. Because – and I always find this an important point – there are no easy answers. It seems amazing that 15 years ago, almost everyone was asking what “this Internet” was for and whether we actually needed it at all. But in a decade’s time, the world will look back at us in a similar way – half amused and half shocked at how little use we made of the opportunities provided by digitalization.
Digital masters do not see transformation as a technological challenge.
Individualization through digitalization
In any case, one thing is clear – and this concerns every single company: we will see more and more individualization towards the customer. The lot size of products will move closer and closer to “one”, because the work that companies do will be tailored more and more towards satisfying the individual needs of each customer. Industrial manufacturing will of course restrict how this develops in certain industries. But a company’s knowledge about its customers is constantly on the rise – and as a result, the possibilities of creating the perfect product are, too.
About Think Tank “Digital Transformation”
Digitalization creates a powerful imperative for us to change our business thinking and activities. But that is easier said than done. Where do the challenges lie for entrepreneurs and managers? Do companies have a nucleus in which digital change can begin particularly well and effectively? What basic conditions must be created – not only in companies, but also, for example, by the government and society – for this to take place? What skills should employees have and, in a company experiencing digitalization on several levels, who is actually in a position to keep up with the changes involved?
In this article, which is continually updated, we look to answer these questions and many more. We hear from digitalization experts from a variety of scientific fields such as business economics, management, futurology, or IT, as well as from entrepreneurs and practitioners from large companies with management roles or responsibility for staff or processes. And finally, we hear from thinkers who are looking at the main issues of digitalization from the outside.
This article does not aim to be exhaustive, but rather offers a platform to express a wide range of different opinions. It aims to be a space for reflection, to provoke, and perhaps even trigger an argument and debate. A think tank that, to a certain extent, you can watch while it’s thinking.
Image credits: istock/xijian, istock/peopleImages